Comparison of the Economic Impacts of Six Growth Centers on Their Surrounding Rural Areas in Asia

The economic impacts of six growth centers on their surrounding rural areas are examined and compared. The six growth centers are: Chiangmai (Thailand), Surabaya (Indonesia), Jaffna (Sri Lanka), Mariveles (Philippines), Kandy (Sri Lanka), and Taxila-Wah (Pakistan).

An evaluation is attempted of the spread or trickle-down process in the six case studies, as reflected by the income generated in each growth center and the income multipliers obtained in the surrounding rural areas. The hypothesis advanced for testing is that the spending generated by the different sectors of the economy tends to spread unevenly within the growth space, being greater in the zones nearer to the center than further away from it, and that the income multipliers so derived have only a negligible or no impact in the rural areas. It is further postulated that the income generated by the spending category in the growth center and the income multipliers obtained are independent of the size of the center.

The results of the six case studies support, in general, the above hypothesis with regards to the predominance of backwash to income spread in the peripheries of the growth centers. The size of the center does not seem to have a bearing on the magnitude of the income generated or of the multipliers obtained in the surrounding rural areas.